Claiming vat back can improve your business income
If you are a vat registered trader in the UK then you would need to pay vat on most goods and services but are you aware that claiming vat back can enhance your business cash flow? In case you have already paid vat once on any goods or services required for your business or paid vat on it in another eu country then you can definitely make an application for a vat refund.
Most eu countries have adopted the system of vat or value added tax on movement of products and services as a way of collecting more revenue and plugging tax leaks. The UK too has shifted to vat and if you operate a business in the UK then you’ll have to apply for vat registration when your last Twelve month sales turnover touches ?70,000. As a vat registered trader you will need to pay and collect vat on all purchases and sales in connection with your company according to the classification of those products or services as per the HM Revenue and Customs or hmrc vat department.
However, to prevent double taxation on such services and goods, the hmrc department has produced vat rules that will permit you to definitely claim vat back on any services or goods purchased for your business. This amount can be recovered even if you have paid that vat in another eu country that vatnumbersearch.com follows vat, provided you are able to show documentary proof which includes the vat invoice or vat receipt. If you have imported goods to the UK after paying vat in the nation of origin or have attended a trade fair in a foreign eu country where vat has been charged to you then these can be claimed back after you fill the necessary vat reclaim form.
You need to hire a proficient vat agent with complete understanding of uk vat and eu vat rules so your vat refund claim is passed in the shortest time possible. You’ll have a time frame of 9 months following the end of the year or so after you had first paid your vat on those goods or services. You may use several online vat services offered by hmrc vat including filing online claims for vat refunds. You will need to register at the hmrc website before you fill the required online vat form for vat reclaim. The form will then be forwarded to the member eu country in which you may have paid vat initially, together with scans of vat invoices that you might need to attach to the application.
Once you get a confirmation usually within 15 days of receipt of the refund claim, it will take around 4 months for the claim to be approved from that member country before you can get your vat back. In case any additional clarification or documents are needed then you definitely should expect a delay of four more months and therefore it is essential to get it right the very first time itself. Your vat refund may be deposited in a bank account which you specify within or outside Britain. However, this amount will be in the currency of the country of origin and will need to be converted into sterling pounds before it can be transferred to your UK banking account.
Even though the process to reclaim vat back is a bit tedious, a competent vat agent can apply for vat refunds on your behalf and notify you about the status of the applications. The fact is that claiming vat back can indeed improve your business income by pumping back that double-taxed amount directly into your business.